Saum Sutaria
TENET HEALTHCAREAbout Saum Sutaria
Saum Sutaria, M.D., is Chairman and Chief Executive Officer of Tenet Healthcare, serving as CEO since September 2021, Chairman since August 2023, and director since November 2020 (age 52) . He holds B.A. degrees in molecular/cellular biology and economics (UC Berkeley) and an M.D. (UC San Diego); he previously held an associate clinical faculty appointment at UCSF . Under his leadership, Tenet delivered 2024 Adjusted EBITDA growth of 13% YoY, a consolidated Adjusted EBITDA margin of 19.3%, leverage of 2.54x, and approximately $1.1B in free cash flow, supported by a portfolio transformation (sale of 14 hospitals, expansion of USPI) . The company’s 2022-2024 performance-based RSUs were earned at 199.7% of target with Relative TSR ranked first vs peers, reinforcing pay-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Tenet Healthcare | Chief Operating Officer | Jan 2019 – Sep 2021 | Led operations through portfolio optimization and disciplined cost management ahead of CEO transition . |
| Tenet Healthcare | President | Nov 2019 – Sep 2021 | Oversaw enterprise performance and transformation initiatives . |
| Tenet Healthcare | Chief Executive Officer | Sep 2021 – present | Portfolio reshaping (14 hospital divestitures; USPI expansion), deleveraging, margin expansion . |
| Tenet Healthcare | Chairman of the Board | Aug 2023 – present | Combined CEO/Chair role with independent Lead Director structure . |
| McKinsey & Company | Senior Partner | ~18 years prior to 2019 | Advised hospitals/health systems and investors; deep operating and strategy expertise . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| University of California, San Francisco | Associate Clinical Faculty (Internal Medicine/Cardiology focus in training) | Prior to Tenet | Academic/clinical grounding . |
| Public company boards | Director | N/A | Does not serve on any other public company board . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 | 2025 (per amended agreement) |
|---|---|---|---|---|
| Base Salary ($) | 1,441,154 | 1,500,000 | 1,500,000 | 1,500,000 (minimum per agreement) |
| Target Bonus (% of salary) | 150% (AIP target level in effect) | 150% (AIP target level in effect) | 150% (AIP target level) | ≥200% beginning in 2025 |
| Actual AIP Payout ($) | 2,340,000 | 6,300,000 | 6,750,000 | |
| Cash Retention Bonus ($) | — | — | 500,000 | |
| Perquisites (notable) | — | — | Personal aircraft incremental cost $161,033 |
Notes:
- 2024 AIP target amount $2,250,000; individual multiplier was 150%; corporate funding 200% of target; compliance modifier 0% .
- Amended and restated employment agreement (Jan 23, 2025) also provides annual Company ERA contribution ≥$250,000 .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Design and Results
| Metric | Weight | Threshold | Target | Maximum | Actual Performance | Payout as % of Target | Weighted Payout |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA | 70% | (company-set scale) | $3.995B | (company-set scale) | Achieved maximum | 200% | 140% |
| Adjusted FCF Less NCI | 30% | (company-set scale) | $588M | (company-set scale) | Achieved maximum | 200% | 60% |
| Final Pool | — | — | — | — | — | — | 200% of Target |
- Individual Performance Multiplier for CEO: 150% (driving strategy, strong financial/operational delivery, leadership/talent depth) . Quality/compliance modifier: 0% .
Long-Term Incentives (LTI)
Structure and metrics:
- Mix: 60% performance-based RSUs (PRSUs), 40% time-based RSUs for CEO .
- PRSU financial metrics: Adjusted EPS (50%) and Adjusted FCF Less NCI (50%), set annually within a 3-year performance period; Relative TSR multiplier ±25% vs CHS/HCA/UHS, capped overall at 250% .
- 2022 PRSUs certified at 199.7% of target (above-target Adjusted EPS; 2023–2024 metrics at/above max; Relative TSR ranked 1st) .
2024 Grants (target grant-date value):
| Award | Target Value ($) |
|---|---|
| PRSUs (60%) | 9,000,068 |
| RSUs (40%) | 6,000,045 |
| Total 2024 LTI | 15,000,113 |
One-time 2025 retention LTI (per employment agreement):
- $18,000,000 (40% time-based RSUs vest ratably over 4 years; 60% PRSUs over 4-year performance with annual financial metrics and a cumulative TSR modifier) .
Pay Outcomes (Summary Compensation Table)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | 1,441,154 | -0- | 6,847,258 | 2,340,000 | 418,716 | 11,047,128 |
| 2023 | 1,500,000 | -0- | 10,130,393 | 6,300,000 | 587,717 | 18,518,109 |
| 2024 | 1,500,000 | 500,000 | 15,113,930 | 6,750,000 | 797,623 | 24,661,553 |
Governance guardrails: No option repricing without shareholder approval; no excise tax gross-ups on CoC benefits; clawback policies compliant with NYSE Rule 303A.14; anti-hedging/anti-pledging policy .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 368,683 shares; <1% of outstanding as of Mar 3, 2025 . |
| Pledged/Hedged Shares | No director or current executive officer has pledged shares; anti-hedging/anti-pledging policy in effect . |
| Stock Ownership Guideline | CEO: 6x base salary; NEOs in compliance or on track; retention of net shares until compliant . |
| 2024 RSU/PRSU Vested | CEO acquired 196,040 shares on vesting during 2024 (value realized $18,246,724) . |
| Insider Trading Policy | Robust insider trading procedures filed with Form 10-K; executive sales subject to policy windows . |
Outstanding and scheduled vesting (as of 12/31/2024):
| Grant | Type | Unvested/Unearned Units (#) | Status/Vesting |
|---|---|---|---|
| 9/1/2021 | Time-based RSUs | 53,341 | Vest 8/31/2025 . |
| 9/1/2021 | Performance RSUs | 106,682 (max) | Performance period 1/1/2021–6/30/2025; Relative TSR modifier; reported at maximum potential . |
| 2/23/2022 | Time-based RSUs | 21,066 | Vest ratably over 3 years . |
| 2/23/2022 | PRSUs | 126,203 | Earned at 199.7%; vested 2/23/2025 . |
| 3/1/2023 | Time-based RSUs | 72,768 | Vest ratably over 3 years . |
| 3/1/2023 | PRSUs | 163,728 (max) | Vest 3/1/2026 subject to 2023–2025 metrics and TSR modifier . |
| 2/28/2024 | Time-based RSUs | 67,250 | Vest ratably over 3 years . |
| 2/28/2024 | PRSUs | 84,063 (max, first tranche) | Vest 2/28/2027 subject to 2024–2026 metrics and TSR modifier . |
Implications for selling pressure: Large PRSU vesting occurred Feb 23, 2025 from 2022 grants; additional time-based tranches and PRSU cliffs in 2025–2027 create periodic liquidity events, with sales constrained by ownership guidelines and anti-hedging/pledging policy .
Employment Terms
| Provision | Terms |
|---|---|
| Agreement | Amended & Restated Jan 23, 2025; term through Dec 31, 2028 with auto one-year renewals . |
| Compensation Floors | Base salary $1.5M; AIP target ≥200% of salary starting 2025; ERA contribution ≥$250,000/year . |
| One-time Retention LTI | $18M (40% time RSUs over 4 yrs; 60% PRSUs over 4 yrs with annual financial metrics and cumulative TSR modifier) . |
| Severance (Non-CoC) | If terminated without cause/for good reason outside CoC window: prior-year AIP bonus; pro-rata current-year AIP (actual); cash equal to 2.5x (salary + target bonus) paid over 2.5 years; accelerated vesting of all unvested equity/LTI; continued health/welfare for 2.5 years . |
| Severance (CoC window) | If within 6 months pre- or 2 years post-CoC: prior-year AIP; pro-rata current-year AIP; 3.0x (salary + target bonus) lump sum; accelerated equity; health/welfare for 3 years . |
| Restrictive Covenants | Perpetual confidentiality/non-disparagement; employee non-solicitation during employment + 2 years; non-compete vs four primary competitors during employment + 1 year . |
| Clawbacks | Legacy and Rule 10D-1 compliant clawbacks on incentive compensation . |
| Tax Gross-Ups | No excise tax gross-ups on CoC benefits . |
Board Governance
- Role/Independence: Combined Chairman & CEO; only non-independent director on a 13-person board; 12 of 13 nominees are independent .
- Lead Independent Director: Senator J. Robert Kerrey with robust authorities (agenda approval, executive sessions, shareholder engagement) .
- Committees: Audit, HR (Compensation), Nominating & Corporate Governance, Quality/Compliance & Ethics (QCE), and ESG; all-Independent membership; CEO serves on none .
- Attendance: Board met 6 times in 2024; all directors met ≥75% attendance; 12 directors attended 2024 AGM .
- Anti-hedging/pledging policy; regular independent executive sessions; shareholder rights and governance practices detailed in Corporate Governance Principles .
Compensation Governance, Peer Group, and Shareholder Feedback
- HR Committee: All independent; uses Meridian Compensation Partners as independent advisor; conducts risk assessment and investor engagement .
- Peer Group: Direct peers—CHS, HCA, UHS; additional peers—Baxter, BD, Boston Scientific, DaVita, Encompass Health, Henry Schein, Humana, LabCorp, Molina, Quest Diagnostics, Select Medical, Stryker .
- Say-on-Pay: 96%+ approval at 2024 AGM; program kept consistent given strong support .
Performance & Track Record
- 2024 portfolio actions: Divested 14 hospitals for gross proceeds of $4.9B; reduced debt by ~$2.1B; USPI added ~70 ASCs (higher acuity mix) .
- Operating performance: Adjusted EBITDA +13% YoY; consolidated Adjusted EBITDA margin 19.3%; admissions +4.7%; USPI same-facility revenue +7.8% .
- Balance sheet/cash: Leverage 2.54x EBITDA; ~$1.1B free cash flow; ~$$3.0B cash on hand exiting 2024 .
- PRSU outcomes: 2022 grant cycle certified at 199.7% with top-quartile Relative TSR (1st vs direct peers) .
Director Service and Compensation (CEO as Director)
- Board service: Director since 2020; Chairman since 2023; not independent due to executive role .
- Committees: None (all committees composed of independent directors) .
- Director pay: Employee directors receive no director compensation; only CEO pay disclosed in NEO tables .
Related Party Transactions and Risk Indicators
- Related party transactions: None requiring disclosure since beginning of last fiscal year .
- Risk mitigants: Prohibition on hedging/pledging; robust clawbacks; no option repricing or CoC tax gross-ups; committee independence; compliance/quality oversight via QCE Committee .
Investment Implications
- Pay-for-performance linkage is strong: AIP heavily weighted to Adjusted EBITDA/FCF with 200% pool in 2024; PRSUs tied to Adjusted EPS/FCF with relative TSR modifier, and 2022 PRSUs earned at 199.7% with TSR rank 1st—aligning payouts with results .
- Retention and overhang: The $18M four-year retention LTI (granted 2025) and sizable outstanding RSUs/PRSUs create retention hooks but also scheduled vesting events through 2027 that can be supply overhangs; ownership guidelines and insider policy temper near-term selling pressure .
- Alignment and governance: CEO ownership, no pledging, 6x salary guideline, high Say-on-Pay support, and independent committees support alignment; combined Chair/CEO risks are mitigated by a strong Lead Independent Director framework and majority independent board .
- Change-in-control economics: 2.5x (non-CoC) and 3.0x (CoC window) cash severance plus equity acceleration provide standard market protections; one-year non-compete (plus non-solicit) reduces immediate flight risk but implies meaningful payouts upon a qualifying separation .